Bain & Company
Company type | Incorporated partnership |
---|---|
Industry | Management consulting |
Founded | 1973[1] |
Founder | Bill Bain[1] |
Headquarters | Boston, Massachusetts, U.S. |
Number of locations | 56[2] |
Key people | Bob Bechek |
Products | Management consulting services |
Revenue | $3.7-4.5 billion (estimated 2017)[3][4] |
Number of employees | 8,000 (2018)[5] |
Website | www.bain.com |
Bain & Company is a global management consultancy headquartered in Boston, Massachusetts. It is one of the 'Big Three' management consultancies (MBB).[6] The firm provides advice to public, private, and non-profit organizations.
Bain was founded in 1973 by former Boston Consulting Group VP William Bain. In the 1980s the firm grew internationally. Bill Bain later established the investment company Bain Capital. Bain experienced several setbacks and financial troubles from 1987 to the early 1990s. Mitt Romney and Orit Gadiesh are credited with returning the firm to profitability and growth in their sequential roles as the firm's CEO and chairman respectively. In the 2000s, Bain continued to expand and create additional practice areas focused on working with non-profits, technology companies, and others. It developed a substantial practice around working with private equity firms.
Corporate history
Establishment
The idea for Bain & Company was conceived by founder William Bain during his time at the Boston Consulting Group (BCG).[7][8] In 1970, Burce Henderson decided to divide his firm into three competing mini-firms: blue, red, and green. Bill Bain and Patrick Graham headed the blue team.[9] The blue team accounted for over half of BCG's revenue and profits, and won the internal competition. After the competition, Mr. Bain grew increasingly frustrated by the wait for Henderson's retirement, the firm's project-based approach to consulting, and the refusal of management to help clients execute on the firm's advice.[7][8] Around this time, Mr. Bain is quoted to have said to feel like 'a consultant on a desert island, writing a report, putting it in a bottle, throwing it in the water, then going on to the next one'.[9]
Three years later, in 1973, Mr. Bain resigned to start his own consulting firm.[9][a] Most of the senior members of the 'blue team' followed Mr. Bain to his new found company, which was started from his apartment in the Beacon Hill neighborhood of Boston.[10] A significant part of firms for which Mr. Bain was responsible at BCG also followed Bain to the new company. Within a few weeks, Bain & Company was working with seven former BCG clients;[7] this included two of BCG's largest clients, Black & Decker and Texas Instruments.[8][9][11] As a result, Henderson accused Mr. Bain of stealing BCG's clientele.[8] It is believed the competition Henderson put out laid the foundation for Bain & Company, and is viewed by many as a "disaster" from Henderson.[9] Mr. Bain was the expected successor of Henderson as CEO.[7][8]
Bain & Company grew quickly,[12] primarily through word-of-mouth among CEOs and board members.[13] The firm established its first formal office in Boston.[7] This was followed by a European office in London in 1979.[7] Bain & Company was incorporated in 1985.[9] The firm grew an average of 50 percent per year, reaching $150 million in revenues by 1986.[13] The number of staff at the firm tripled from 1980 to 1986, reaching 800 in 1987.[13] By 1987, Bain & Company was one of the four largest "strategy specialist" consulting firms.[12] Employee turnover was 8 percent annually compared to an industry average of 20 percent.[13] Some of the firm's largest clients in this period were National Steel and Chrysler, each of which reduced manufacturing costs with Bain's help.[7]
Turmoil
In the late 1980s, Bain & Company experienced a series of setbacks.[11] A public relations crisis emerged in 1987, due to a controversy involving Bain's work with Guinness.[7] Tension was growing over the firm's partnership structure, whereby only Mr. Bain knew how much the firm was making and decided how much profit-sharing each partner received.[13] The stock market crashed the same year, and many Bain clients reduced or eliminated their spending with the firm.[9] There were two rounds of layoffs, eliminating about 30 percent of the workforce.[9][11][b]
The Guinness share-trading fraud began with Britain's Department of Trade and Industry investigating whether Bain's client Guinness illegally inflated its stock price.[8] Bain had helped Guinness trim 150 companies from its portfolio after a period of excessive diversification,[13] and expand into hard liquor with the acquisition of two whiskey companies,[7] growing profits six-fold.[13] During this time, Bain made an exception to company policy by allowing a consultant to serve as an interim board member and head of finance for Guinness.[8][13] Bain & Company was not accused of any wrongdoing and no charges were pressed against Bain[14] for the manipulation of the stock price, but having a Bain consultant work as both vendor and client drew criticisms of Bain's handling of a conflict of interest situation.[8][13]
In 1985 and 1986, Bain & Company took out loans to buy 30 percent of the firm from Mr. Bain and other partners for $200 million and used the shares to create an Employee Stock Ownership Plan (ESOP).[11][15] These shares of the company were bought at five times Bain & Company's annual revenue, more than double the norm, and cost the firm $25 million in annual interest fees, exacerbating the firm's financial troubles.[11] Mr. Bain hired former U.S. Army general Peter Dawkins as the head of North America in hopes that new leadership could bring about a turnaround, but Dawkins' leadership led to even more turnover at the firm.[7] Bill Bain also attempted to sell the firm, but was unsuccessful at finding a buyer.[7]
Rebound
Mr. Bain brought in Mitt Romney to lead Bain Capital in 1983.[9][c] Bain Capital was an independent private equity firm that would buy companies that Bain Capital consultants would improve and re-sell.[9] Many of Bain's partners invested in Bain Capital's funds.[9] Romney was appointed interim CEO of Bain & Company in 1990[15] and is credited with saving the company from bankruptcy during his one-year stint in the position.[17][18] Romney allowed managers to know each other's salaries,[17] re-negotiated the firm's debt,[19] and restructured the organization so more partners had an ownership stake in the firm.[11] Romney convinced the founding partners to give up $100 million in equity.[15] Bain and most of the founding partners left the firm.[9]
In 1993, Romney organized an election to appoint new leaders the following year, leading to the appointment of Orit Gadiesh as chairman and Tom Tierney as Managing Director.[9][20] Gadiesh improved morale and loosened the firm's policy against working with multiple companies in the same industry, in order to decrease the firm's reliance on a small number of clients.[18] By 1993, Bain & Company was growing once again[10][18] and Mitt Romney left to pursue a career in politics.[7] The firm went from 1,000 employees at its peak, to 550 in 1991, back up to 800.[18] The firm opened more offices, including one in New York in 2000.[7] From 1992 through 1999, the firm grew 25 percent per year and expanded from 12 to 26 offices.[21] By 1998, the firm had $220 million in annual revenues and 700 staff.[8]
Recent history
Bain created two technology consulting practice groups, bainlab and BainNet, in 1999 and 2000 respectively.[7] bainlab was originally founded as Bain New Venture Group.[22] It helped startups who otherwise might not afford Bain's fees and accepted partial payment in equity.[22] In February 2000, Gadiesh was elected for her third consecutive term as the firm's chairman, and Tom Tierney was replaced by John Donahoe as managing director.[10] Around 2000, the firm became more involved in consulting private equity firms on which companies to invest in and collaborating with technology consulting firms.[21] By 2005, Bain had the largest share of the market for private equity consulting.[23] By 2018, Bain's Private Equity group was over three times as large as that of the next largest consulting firm serving Private Equity firms, and representing 25% of Bain's global business.[24]
Bain & Company does not publish its revenues, but it is estimated to have experienced double-digit annual growth in the 2000s.[23] Although the market for management consulting was declining, the Big Three management consulting firms like Bain & Company continued to grow.[25] Bain expanded to new offices in other countries,[7] including India in 2006.[26][27] Like the other big consulting firms, it began working more with governments.[25] Bain maintained a "generalist" approach to management consulting, but created a separate specialist business unit for IT and technology.[23] In 2012, Bob Bechek was appointed CEO and was later ranked as the most-liked CEO in Glassdoor employee surveys.[28] In November 2017 Bain & Company announced that Bob Bechek steps down as the worldwide managing director. Manny Maceda succeeds Bechek as the worldwide managing director effective March 2018.[29] In an interview with the Financial Times, Maceda announced to focus on the expansion of Bain's digital practice.[30]
Consulting services
Bain & Company provides management consulting services primarily to Fortune 500 CEOs.[7] The firm advises on issues such as private equity investments, mergers & acquisitions, corporate strategy, finance, operations, and market analysis.[31] It also has departments focused on customer loyalty, word of mouth marketing, and digital technology.[32] Most of its consulting is on corporate strategy.[33]
In 2000, The Bridgespan Group was created to work with non-profits and to facilitate pro-bono work for staff.[7] Bain & Company also maintains an in-house social impact practice, and pleaded in 2015 to invest $1 billion in pro bono consulting by 2025.[34][35] This practice is built upon different pillars, including social and economic development, climate change, education, and local community development. Organizations that Bain has supported through pro-bono work include UNHCR, the World Childhood Foundation and Teach for America.[36][37] Bain's pro-bono work was in 2015 awarded by Consulting Magazine as a winner of their Excellence in Social and Community Investment Awards for having 'redefined how companies approach corporate social responsibility'.[38]
Later in the 2000s, Bain introduced service packages for specific areas of expertise, such as the supply chain.[7] The firm also became more heavily involved in consulting with private equity firms, advising on what companies to buy, facilitating a turnaround, and then re-selling the company.[23] In early 2006, Bain started selling its "net-promoter score" system, which tracks customer sentiment.[39]
Reception
Bain & Company claims a typical engagement increases the client's profits by 5-10 times the amount spent on its services.[8] A March 1989 audit by Price Waterhouse found that the market value of Bain's clients increased an average of 456 percent over nine years.[8] The "Bain Index," which tracks the collective stock prices of Bain clients, grew in stock price by 319% from 1980 to 1987, compared to 141% growth in the Dow Jones Industrial Average.[13]
According to Fortune Magazine, Bain asks clients to make long-term commitments to the firm and consultants often become deeply embedded in their clients' daily operations.[13] Sometimes consultants are acting as though, and treated as if, they are a member of the company's own senior management.[9] Often clients become reliant on Bain & Company, who has consultants integrated throughout the company's key functions.[13]
Corporate culture
Bain & Company is known for being secretive.[8][13] The firm is sometimes referred to as the "KGB of Consulting."[9][33] Clients are given codenames.[40] Employees must sign nondisclosure contracts, promising not to reveal client names, and are required to adhere to a "code of confidentiality."[8]
Bain employees are sometimes called "Bainies."[31] It was originally a pejorative term, but was adopted by employees as an affectionate term.[31] According to Fortune Magazine, were Bain & Company a person, "it would be articulate, attractive, meticulously well groomed, and exceedingly charming. It would exude Southern gentility. But it would also be a shrewd, intensely ambitious strategist, totally in control."[13]
Bain is often placed among the top best places to work in annual rankings by Glassdoor[41] and Consulting Magazine.[42] Bain primarily hires MBAs from prestigious business schools,[8] but it is one of the first firms to hire consultants with a bachelor's degree.[33] The firm is organized primarily by geographic office, with each location acting somewhat independently.[33] It also has a mix of overlapping functional (such as M&A, technology, or loyalty) and industry (financial services, healthcare, etc.) teams.[33] An elected worldwide managing director is allowed up to three, three-year terms under the firm's bylaws.[21] Bain is unusual in the management consulting industry in that new consultants are not required to specialize in an industry or practice area.[31]
Notable alumni
This is a non-exhaustive list of notable alumni of Bain & Company.
Business
- Bill Bain — Founder of Bain & Company
- Paul Achleitner — Chairman Deutsche Bank
- Javed Ahmed — CEO of Tate & Lyle
- Richard Allison — CEO of Dominos Pizza[43]
- Joshua Bekenstein — Managing Director of Bain Capital and Philanthropist
- Adam Braun — Founder of Pencils of Promise and Philanthropist
- Greg Brenneman — Former CEO of PwC Consulting, Former CEO of Burger King and current Chairman of CCMP Capital
- Kenneth Chenault — CEO of American Express
- Edward Conard — Author of two New York Times bestsellers and former MD of Bain Capital
- Scott Cook — Co-Founder of Intuit and chairman of eBay and Procter & Gamble
- Gary Crittenden — CFO of Citigroup, Inc.
- Luca Desiata - CEO of SOGIN
- John Donahoe — Former CEO of eBay and current CEO of ServiceNow
- Anne Glover — Co-founder of European VC fund Amadeus Capital Partners and serves on the Council for Science and Technology
- Dave Goldberg — Former CEO of SurveyMonkey and Philanthropist
- Steve Jurvetson — Venture Capitalist and board member of amongst others SpaceX and Tesla
- Richard Koch — Founder of L.E.K. Consulting and venture capitalist
- Michael Kolowich — Internet entrepreneur and documentary maker
- Jonathan Kraft — President of The Kraft Group, president of the New England Patriots
- Patrick Lencioni — Business author
- Federico Marchetti (businessman) — Founder YOOX and CEO YOOX Net-a-Porter Group
- Ian Meakins — Former CEO of Wolseley plc
- Jane Mendillo — President and CEO, Harvard Management Company
- Stephen Pagliuca — MD of Bain Capital; co-owner of the Boston Celtics
- Mark Pincus — Founder of Zynga
- Bertrand Pointeau — Author of “L'entreprise expliquée aux ados”
- Fred Reichheld — Business author
- Thomas J. Tierney — Former CEO of Bain & Company, Founder of The Bridgespan Group, and Chairman of eBay
- Kevin Rollins — CEO of Dell, Inc.
- Grace Ueng — Founder and CEO of Savvy Growth
- Bernd Venohr — Former chairman Accenture DACH region and professor
- Meg Whitman — former CEO of eBay and CEO of Hewlett-Packard
- Susan Wojcicki — CEO of YouTube
Politics and public service
- Peter Aman — COO of the City of Atlanta (2008-2011) and current candidate for Mayor of Atlanta
- Fraser Bullock — Former COO of the Salt Lake Organizing Committee (SLOC) of the 2002 Winter Olympics and Founding member of Bain Capital
- Andrew Feldman, Baron Feldman of Elstree — Chairman of the British Conservative Party
- Steven Hoffman — Chair of the Cannabis Control Commission (2017- )
- Dan Liljenquist — Former Utah state senator
- Robert Maginn — Chairman of the Massachusetts Republican Party (2011-2013)
- Mitt Romney — Governor of Massachusetts (2003-2007) and presidential candidate
- Nicholas Yang — Secretary for Innovation and Technology of the Hong Kong Special Administrative Region and former Executive Vice President of Hong Kong Polytechnic University
- Jeffrey Zients — Director of the National Economic Council, Former Director of the Office of Management and Budget, and First Chief Performance Officer of the United States
Academics
- Roger H. Brown — President of the Berklee College of Music
- Robin Buchanan — Former dean and president of the London Business School
- Vivek Paul — Adjunct Professor at Stanford University
- Andy Wasynczuk — Senior lecturer of business administration for Harvard Business School and former Chief Operating Officer and Senior Vice President for the New England Patriots
- Suzy Welch — Former editor Harvard Business Review and author
Other
- Taylor Barada — Former soccer player
- Pete Dawkins — Former Heisman Trophy and Maxwell Award winner, and All-American, and current senior adivsor for Virtu Financial
- Michael Murphy — Former Olympic diver
Notes
References
- ^ a b "#77 Bain & Co". Forbes. Retrieved July 3, 2017.
- ^ "Worldwide offices". Bain & Company. Retrieved July 3, 2017.
- ^ https://www.economist.com/news/business/21577376-world-grows-more-confusing-demand-clever-consultants-booming-brainy
- ^ https://globenewswire.com/news-release/2017/11/20/1197550/0/en/Bain-Company-Elects-Manny-Maceda-as-Worldwide-Managing-Director.html
- ^ https://www.bostonglobe.com/business/2018/01/17/bain-founder-bill-bain-dies-age/kT0h8zL5aTJLX6fpqxkZxI/story.html
- ^ "Freelance consulting: Sharp suits or pyjamas?". The Economist. March 2, 2015. Retrieved July 12, 2017.
- ^ a b c d e f g h i j k l m n o p q r s Grant, Tina (2003). Bain & Company. Vol. 55. St. James Press. pp. 41–43.
{{cite book}}
:|work=
ignored (help) - ^ a b c d e f g h i j k l m n Gallese, Liz Roman (September 24, 1989). "Counselor To The King". NYTimes.com. Retrieved July 3, 2017.
- ^ a b c d e f g h i j k l m n o Kiechel, W. (2010). The Lords of Strategy: The Secret Intellectual History of the New Corporate World. Harvard Business Press. ISBN 978-1-59139-782-3. Retrieved July 8, 2017.
- ^ a b c "Bain & Company", Vault Employer Profile, 2001
- ^ a b c d e f "Can Bain Consultants Get Bain & Co. Out Of This Jam?". Bloomberg.com. February 11, 1991. Retrieved July 5, 2017.
- ^ a b Payne, Adrian; Lumsden, Cedric (1987). "Strategy Consulting - A Shooting Star?". Long Range Planning. 20 (3): 53–63.
- ^ a b c d e f g h i j k l m n Perry, Nancy (April 27, 1987). "A Consulting Firm Too Hot to Handle? Bain & Co. gets its hands deep in the trousers of client companies, says an executive who knows it well. Maybe too deep, the Guinness scandal suggests". Fortune. Retrieved July 3, 2017.
- ^ "Bain defends consultancy industry". Financial Times. Retrieved August 10, 2017.
- ^ a b c "Did Mitt Romney get a 'bailout' for Bain & Company?". Washington Post. July 24, 2012. Retrieved July 12, 2017.
- ^ Lattman, Peter (August 31, 2012). "Before Romney's Big Speech, a Focus on Bain". DealBook. Retrieved July 10, 2017.
- ^ a b Groth, Aimee; Lubin, Gus (December 15, 2011). "A Company Saved From Bankruptcy By Romney Was Just Named The Best Employer In America". Business Insider. Retrieved July 9, 2017.
- ^ a b c d Rifkin, Glenn (April 1, 1994). "Profile; Don't Ever Judge This Consultant by Her Cover". NYTimes.com. Retrieved July 10, 2017.
- ^ "A bail-out for Romney?". The Economist. August 31, 2012.
- ^ Sinclair, Emma (March 11, 2013). "Biz Idol: How a stint in the Army taught Orit Gadiesh lessons to lead Bain & Company". Telegraph.co.uk. Retrieved July 10, 2017.
- ^ a b c Jack Sweeney (February 2001). "Raising Bain". Consulting Magazine. Archived from the original on August 15, 2007. Retrieved January 30, 2012.
- ^ a b F. Czerniawska (13 January 2016). Management Consultancy: What Next?. Palgrave Macmillan UK. p. 81. ISBN 978-1-4039-0718-9.
- ^ a b c d "Consulting in the right direction". The Economist. Retrieved July 10, 2017.
- ^ https://www.linkedin.com/jobs/view/537731587/
- ^ a b Stern, Stefan (June 24, 2010). "Management: Reinventing the Spiel". Retrieved August 7, 2017.
Even in these bad economic times, the top three have also been increasingly working with governments around the world - in healthcare, for example, and helping to support struggling and restructuring industries (BCG has been an important adviser on the US automotive rescue).
- ^ Mahanta, Vinod. "Steve eyes desi consulting pie". The Economic Times. Retrieved August 7, 2017.
- ^ "Feeding off India's growth- Business News". Business Today. November 18, 2007. Retrieved August 7, 2017.
- ^ "This year's best-rated CEO by employees is someone you've probably never heard of". Washington Post. June 8, 2016. Retrieved July 9, 2017.
- ^ "Bain & Company Elects Manny Maceda as Worldwide Managing Director". Global News Wire. 2017-11-20. Retrieved 2018-02-02.
- ^ "Bain names Manny Maceda as new global head". the Financial Times. 2017-11-19. Retrieved 2018-02-02.
- ^ a b c d "Bain & Company WetFeet Insider Guide" (PDF). Wetfeet. 2005. Retrieved July 5, 2017.
- ^ "History of innovation in management consulting". Bain & Company. Retrieved July 12, 2017.
- ^ a b c d e Mariam, Naficy (October 6, 1997). The Fast Track: The Insider's Guide to Winning Jobs in Management Consulting, Investment Banking, & Securities Trading. Crown Business. ISBN 0767900405.
- ^ "How A Top Management Consulting Firm Is Helping Social Enterprises Thrive". Forbes. Retrieved 2018-02-02.
- ^ "Bain & Company". Vault. Retrieved 2018-02-02.
- ^ "Corporate Philanthrophy Report: Bain & Company". Corporate Philanthropy Report. Retrieved 2018-02-02.
- ^ "Bain & Company" (PDF). Bain Germany. Retrieved 2018-02-02.
- ^ "Consulting Magazine Announces Its Excellence in Social Community Investment Awards Winners". Global News Wire. Retrieved 2018-02-02.
- ^ Kranhold, Kathryn (July 10, 2006). "Client-Satisfaction Tool Takes Root". The Wall Street Journal. Retrieved August 8, 2017.
- ^ "To the brainy, the spoils". The Economist. May 11, 2013. Retrieved July 9, 2017.
- ^ Weller, Chris; Jacobs, Sarah (December 8, 2016). "Bain & Company was just named the best workplace of 2017". Business Insider. Retrieved July 3, 2017.
- ^ "Bain & Company". Consulting Magazine. August 8, 2013. Retrieved August 7, 2017.
- ^ http://markets.businessinsider.com/news/stocks/Domino-s-Pizza-CEO-Patrick-Doyle-To-Step-Down-Promotes-Richard-Allison-To-CEO-1012770107
External links
- Bain & Company
- Management consulting firms of the United States
- Bain Capital
- Economics consulting firms
- International management consulting firms
- Companies based in Boston
- American companies established in 1973
- Consulting firms established in 1973
- Financial services companies established in 1973
- 1973 establishments in Massachusetts
- Bain & Company employees
- Privately held companies based in Massachusetts